Wednesday, September 10, 2008

Apple Offers Networks More Price Options for TV Shows

Apple likes to remake the world to its own aesthetic, but when parts of the world assert their natural ugliness, Apple will in fact back down. The latest example is the re-emergence of NBC shows on the iTunes store for download.

Apple and the network broke up a year ago in a dispute over pricing of TV shows sold through iTunes. Apple insisted that all shows should cost $1.99. NBC wanted the flexibility to charge whatever price it saw fit — more for hits and less for older shows.

According to Jean-Briac Perrette, who runs digital distribution for NBC Universal, Apple has now given the network much of what it wanted. NBC can choose from three price points for shows: 99 cents, $1.99 and $2.99. In his product presentation Tuesday, Steve Jobs mentioned the $2.99 price point would be for high-definition programs. But Mr. Perette said the network could use that price as the base price for certain programs, such as two-hour specials.

In general, the 99-cent price will be for older programs, such as “Kojak” and “The A-Team”. Moreover, the company has much more flexibility to offer bundles of programs. Now, for example, it is offering season passes at discounts to the single show prices. And it can offer packages of programs bundled with other digital goodies, such as games, photos or whatever.

Mr. Perrette said that NBC would have liked even more flexibility, but Apple has given the network most of what it wanted.

“We are pretty comfortable that most of what we are doing will work within those three tiers,” he said. At the same time, the pricing “doesn’t break the simplicity and elegance that Apple stands for,” he said.

An Apple spokeswoman has yet to return my call and e-mail.

NBC is also repairing what many have seen as a rash move to pull out of iTunes and forgo the real cash it generates. Before it left, NBC accounted for 40 percent of the iTunes TV show sales. And it’s hard to imagine that sales on Amazon.com and other distributors have made up the gap.

Apple has been moving to offer more flexibility over the last year. After trying to keep the price of movie downloads low, it now gives studios the freedom to charge prices at or above the price of a DVD. And for full albums, studios can set the price and include digital extras. Songs, to the annoyance of some labels, are still fixed at 99 cents.

(It’s interesting to note what wasn’t announced Tuesday: more deals with the music labels that would let Apple offer music without digital rights management restrictions, more ringtone choices, or over-the-air downloads of song purchases.)

I also asked Mr. Perrette about NBC’s plans for free, advertising-supported content on the iPhone and iPod Touch. He said that the network continues to see free streaming video as another viable avenue for digital distribution that will coexist with paid, commercial-free downloads. But for now, any moves to create streaming versions of NBC shows for Apple products will be left to Hulu, the joint venture between NBC and Fox, he said.